Ali's revenue for the current quarter was flat from a year earlier. BABA's income in the 23Q1 financial quarter was 205.56 billion yuan, which was the same as that of the same period last year. Among them, Chinese business, international business, local life, rookie and cloud business were respectively RMB 1,419 / 17.7 billion, with a year-on-year change of-1%, 2%, 5%, 5% and 10%. Adjusted EBITA fell 18% year-on-year to 34.4 billion yuan, mainly due to the epidemic affecting e-commerce GMV, resulting in a decline in customer management income compared with the same period last year. The adjusted net profit was 31.36 billion yuan, down 31% from the same period last year.
Pay attention to the hierarchical operation of users and increase the share of wallets. BABA achieved the goal of 1 billion domestic consumers last quarter. In the future, BABA will focus on the growth of wallet share of different consumer groups, rather than pursuing the growth of domestic absolute user size. In this regard, BABA will do a good job in user layering and classified operation, and provide different services through the establishment of a multiple consumption matrix.
In the 12 months to June 2021, about 98 per cent of the AAC that spent more than 10,000 yuan on Tmall on Taobao remained active in the past 12 months, unchanged from the previous quarter. 23Q1 fiscal quarter over 123 million AAC in Taobao Tmall per capita consumption of more than 10,000 yuan. There are 25 million members of 88VIP and more than 57000 yuan of ARPU.
Chinese business: marginal recovery after the epidemic, multi-dimensional service to consumers. Customer management income in the quarter was 72.3 billion yuan, down 10% from the same period last year, mainly due to the disturbance of the epidemic, Taobao Tmall GMV dropped by the median year-on-year. With the easing of the epidemic and the gradual improvement of logistics and supply chain problems, operations gradually resumed in June and continued the trend of improvement in July.
At present, BABA is committed to promoting the far-middle and near-field integration layout, starting from consumer demand, the formation of 1) Taobao Tmall-based far-field e-commerce, 2) city warehouse-based mid-field e-commerce, and 3) city retail, ele.me, vegetable shopping-based near-field e-commerce, multi-dimensional service to consumers.
International business: affected by the geographical situation in the short term, continue to strengthen infrastructure construction. In terms of international retail, overall orders fell 4% in the quarter compared with the same period last year, mainly due to the reduction of AliExpress orders caused by the revision of the EU's VAT tax policy, the depreciation of the euro against the US dollar, and the conflict between Russia and Ukraine. The orders of Lazada and Trendyol still maintained steady growth, up 10% and 46% from the same period last year. At present, the annual GMV of international retail business has exceeded 50 billion US dollars. The revenue of international wholesale business increased by 12% and alibaba.com retail sales increased by 16% in the current quarter. In the future, BABA will continue to improve the construction of cross-border logistics network from China to Europe and the local market in Southeast Asia.
Cloud computing: demand fluctuates and the structure is continuously optimized. Aliyun grew 10% year-on-year and slowed this quarter, mainly due to weaker demand from customers in the Internet industry, reduced revenue from online education customers, and the loss of a previous major customer. Among them, the contribution of non-Internet customers' revenue increased steadily, accounting for 53% of the total in this quarter, up 5 pct from the same period last year. The EBITA margin of cloud business is 1.4%, and scale effect is expected to promote the gradual release of future profits.
Optimize the "local area network" business and promote cost reduction and efficiency improvement. In the future, BABA will continue to focus on reducing costs and increasing efficiency: 1) for the nationwide "wide area network" platform business, strengthen the hierarchical operation of users and consolidate the minds of consumers. 2) for "local area network" services that are closely related to location, such as Taocai, box horse, ele.me, etc., there will be more focused urban or regional strategies to achieve economies of scale and reduce unit costs in the "local area network". In this quarter, by controlling customer input, optimizing logistics implementation costs and increasing guest orders, Taote's losses were significantly narrowed compared with the same period last year and month-on-month, and vegetable losses were significantly narrowed, and ele.me UE became a regular employee. The adjusted EBITAmargin of local living services increased from-47.2% in the same period last year to-28.6% in the current quarter.
Maintain a "buy" rating. We estimate that BABA's income for the 2023-2025 fiscal year will be 9035amp 10011 / 1.1025 trillion yuan, and the home net profit of non-GAAP will be 1342GP155551774 billion yuan. Based on core ecommerce 10x 2024e Ppace E, cloud computing 5x 2024e Ppick S, and large entertainment and innovation business 2x 2024e Pmax S, BABA's Hong Kong stock (9988.HK) is given a target price of HK $142,144 / US stock (BABA.N) of US $144,144, maintaining a "buy" rating.
Risk hint: regulatory impact exceeds expectations, e-commerce and cloud computing progress falls short of expectations, and epidemic situation repeatedly exceeds expectations.